Professional Documents
Culture Documents
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Organizational Structure
The formal arrangement of jobs/tasks within an organization.
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Purposes of Organizing Divides work to be done into specific jobs and departments.
Organizational Design
When Managers create or change the structure, they are engaged in Organizational design. Organizational Design is a process that involves decisions about six key elements:
1. Work specialization 2. Departmentalization 3. Chain of command 4. Span of control 5. Centralization and decentralization 6. Formalization
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Organizational Structure
Work Specialization
The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. Overspecialization can result in the form of boredom, fatigue (exhaustion), stress, poor quality, increased absenteeism, and higher turnover.
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Departmentalization by Type
Functional
Grouping jobs by functions performed
Process
Grouping jobs on the basis of product or customer flow
Product
Grouping jobs by product line
Customer
Grouping jobs by type of customer and needs
Geographical
Grouping jobs on the basis of territory or geography
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Geographical Departmentalization
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Product Departmentalization
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Process Departmentalization
+ More efficient flow of work activities Can only be used with certain types of products
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Customer Departmentalization
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Responsibility
The obligation or expectation to perform.
Unity of Command
The concept that a person should have one boss and should report only to that person.
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Skills and abilities of the manager Employee characteristics Characteristics of the work being done Similarity of tasks Complexity of tasks Physical proximity of subordinates Standardization of tasks Sophistication of the organizations information system Strength of the organizations culture Preferred style of the manager
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Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders.
Decentralization
Organizations in which decision making is pushed down to the managers who are closest to the action.
Employee Empowerment
Increasing the decision-making authority (power) of employees.
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More centralization
Environment is stable. Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are significant. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens.
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More Decentralization
Environment is complex, uncertain.
Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are relatively minor. Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions.
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More centralization
Environment is stable. Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are significant. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens.
More Decentralization
Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are relatively minor. Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and 919 flexibility to make decisions.
Mechanistic Organization: An organizational design that is rigid and tightly controlled Organic Organization: An organizational design that is highly adaptive and flexible.
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High specialization Rigid departmentalization Clear chain of command Narrow spans of control Centralization High formalization
Cross-functional teams Cross-hierarchical teams Free flow of information Wide spans of control Decentralization Low formalization
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Contingency Factors
Structural decisions are influenced by:
Overall strategy of the organization
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Functional structure
Departmentalization by function Operations, finance, marketing, human resources, and product research and development Composed of separate business units or divisions with limited autonomy under the coordination and control the parent corporation.
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Divisional structure
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Matrix-Project Structure
What it is:
A structure that assigns specialists from different functional areas to work on projects but who return to their areas when the project is completed. Project is a structure in which employees continuously work on projects. As one project is completed, employees move on to the next project.
Fluid and flexible design that can respond to environmental changes. Faster decision making. Complexity of assigning people to projects. Task and personality conflicts.
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Advantages: Disadvantages:
Boundaryless Structure
What it is: A structure that is not defined by or limited to artificial horizontal, vertical, or external boundaries; includes virtual and network types of organizations.
Advantages:
Disadvantages:
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The entire organization is made up of work groups or selfmanaged teams of empowered employees.
Specialists from different functional departments are assigned to work on projects led by project managers. Matrix and project participants have two managers. In project structures, employees work continuously on projects; moving on to another project as each project is completed.
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An flexible and unstructured organizational design that is intended to break down external barriers between the organization and its customers and suppliers.
Removes internal (horizontal) boundaries:
Eliminates external boundaries: Uses virtual, network, and modular organizational structures to get closer to stakeholders.
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Network Organization
A small core organization that outsources its major business functions (e.g., manufacturing) in order to concentrate on what it does best.
Modular Organization
A manufacturing organization that uses outside suppliers to provide product components for its final assembly operations.
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An open team-based organization design that empowers employees Extensive and open information sharing Leadership that provides a shared vision of the organizations future.
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Terms to Know
organizing organizational structure organizational chart organizational design work specialization departmentalization cross-functional teams chain of command authority responsibility unity of command span of control centralization decentralization employee empowerment formalization mechanistic organization organic organization unit production mass production process production simple structure functional structure divisional structure team structure matrix structure project structure boundaryless organization virtual organization network organization learning organization
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